SALES

CONDITIONAL SALES REMEDIES OF SELLER: BREACH OF 4 COLLATERAL CONTRACT AS DEFENSE TO REPLEVIN. - The seller of a piano under a conditional sale contract agreed that he would use reasonable efforts to sell pianos to those whose names the buyer sent in, and would apply the commissions therefrom on the purchase price. The seller now brings replevin for the piano, and the buyer sets up a breach of this agreement. Held, that the seller may recover. Kohler & Chase v. Turner, 146 Pac. 393 (Wash.).

In a conditional sale a breach of warranty by the seller is, by the weight of authority, no defense to an action of replevin. Hauss v. Savarese, 87 N. Y. Misc. 330, 149 N. Y. Supp. 938; People's Electric Ry. Co. v. McKeen Motor Car Co., 214 Fed. 73. See contra, Guilford, Wood & Co. v. McKinley, 61 Ga. 230, 233. These cases are often explained on the ground that no action for breach of warranty can accrue until title has passed. See Frye v. Milligan, 10 Ont. 509. In substance, however, a conditional sale amounts to an executed sale with a chattel mortgage back. See WILLISTON, SALES, § 326. Thus the sounder explanation is that, as the buyer's right of action neither gives him a lien on the goods, nor prevents him from being in default, it can be no defense to the seller's action to recover possession. Blair v. Johnson & Sons, 111 Tenn. III, 76 S. W. 912. But if the seller has himself prevented the performance of the condition, he cannot claim that the buyer is in default. Thus, a tender of payment by the buyer and refusal by the seller will vest title in the buyer and leave the seller to his action for the price. Ingersoll-Sergeant Drill Co. v. Worthington, 110 Ala. 322, 20 So. 61; Leflore v. Miller, 64 Miss. 204, 1 So. 99. The situation is analogous if the seller has agreed to let the buyer work out the purchase price, and refuses to give him the work to do. Ramsey v. Capshaw, 71 Ark. 408, 75 S. W. 479. Hence, when the seller's breach of contract has prevented the buyer from paying in the way agreed upon, the seller should be unable to assert the default in those payments. Gilbert Co. v. Husted, 50 Wash. 61, 66, 96 Pac. 835, 836; see Brownfield v. Jones Co., 98 Ark. 495, 500, 136 S. W. 664, 666. The language of the court in the principal case does not seem in accordance with this view, but the case may be explained on the ground that it did not appear that the buyer was not in default in an amount in excess of that which would have been paid by means of the commissions.

USURY - VALIDITY OF USURIOUS MORTGAGE RIGHT OF INNOCENT PARTY TO THE MORTGAGE TO FORECLOSE: NEW YORK LAW. The defendant attempted to evade the New York statute which declares all contracts for usurious loans absolutely void (N. Y. CONSOL. LAWS, GENERAL BUSINESS LAW, INTEREST AND USURY, § 373), by executing a mortgage to a dummy mortgagee, and procuring its discount to the plaintiff at an illegal rate of interest. Though the purchase price, which was paid to an agent, went directly to the mortgagor, the mortgagee was ignorant of the nature of the transaction and supposed that the mortgage was merely assigned to him. Held, that he may enforce the mortgage to the extent of the consideration paid. Schanz v. Sotscheck, 152 N. Y. Supp. 851 (App. Div.)

Though on principle the purchase of an accommodation note, since the indorsee is buying the credit of a third person, is not a loan but a true sale, New York and several other states hold such a transaction usurious if the note is discounted at more than the legal rate of interest. Claflin v. Boorum, 122 N. Y. 385, 25 N. E. 360; Whitten v. Hayden, 7 Allen (Mass.) 407; cf. Eastman v. Shaw, 65 N. Y. 522. Contra, Dickerman v. Day, 31 Ia. 444; Holmes v. State Bank of Duluth, 53 Minn. 350; Moore v. Baird, 30 Pa. 138. But the purchase of a mortgage from a dummy mortgagee is distinguishable. Since it is in substance the giving of money to the mortgagor in reliance on his credit alone, it is a true loan, and properly subject to the usury law. Entirely apart from the New York view as to accommodation paper, therefore, the mortgage in the

principal case is absolutely void for usury and no action would lie on the instrument. In the ordinary case arising under the New York statute, it would be contrary to the policy of the statute to allow the lender to recover even his principal, for the contract is expressly made altogether void. But where the lender is an innocent party, as in the principal case, since to refuse recovery would allow the borrower to profit by his own wrong at the expense of one who is entirely innocent, it seems proper to impose a quasi-contractual liability and allow the mortgage to be enforced to this extent. See Pullman's Palace Car Co. v. Central Transportation Co., 171 U. S. 138, 152. This, rather than estoppel, seems to be the true basis of the highly just result of the principal case and of other New York decisions in accord. Payne v. Burnham, 62 N. Y. 69; Verity v. Sternberger, 62 N. Y. App. Div. 112, 70 N. Y. Supp. 894, aff'd 172 N. Y. 633, 65 N. E. 1123. But where in addition to the representation involved in the mere act of transfer there is an express representation that the instrument is valid, the New York courts, on the ground that the mortgagor is estopped to set up the usury, allow a recovery in full upon the instrument. Rider v. Gallo, 153 N. Y. App. Div. 334, 137 N. Y. Supp. 1015; Union Dime Savings Institution v. Wilmot, 94 N. Y. 221; cf. Hurlbut & Sons v. Straub, 54 W. Va. 303. This seems wrong, since it is not possible to be estopped into liability on an absolutely void contract. See 19 HARV. L. REV. 454.

VESTED, CONTINGENT, AND FUTURE INTERESTS — FUTURE INTERESTS IN PERSONALTY ACTION FOR DAMAGES TO CHATTEL, BY EXECUTORY LEGATEE AGAINST EXECUTOR OF FIRST HOLDER. - A necklace was bequeathed to A, with remainder to B in the event of A's dying childless. The contingency occurred, and B now sues A's estate to recover for damage done to the necklace by A and for the loss of part of it. Held, that B can recover. In re Swan, 10 Wkly. Notes 113 (Ch. Div.).

There has been much controversy on the question whether interests in chattels personal are executory or are vested when a corresponding interest in realty would be. See GRAY, RULE AGAINST PERPETUITIES, 3 ed., § 117 a; 14 HARV. L. REV. 397. In the principal case, however, that problem is not involved, as the bequest to B after A's absolute estate is on any view executory. See GRAY, RULE AGAINST PERPETUITIES, 3 ed., § 835. In the analogous situation in realty, damage to the property by the first owner is an immediate wrong to the executory devisee. This is shown by the fact that he may at once enjoin waste. Turner v. Wright, 2 DeG., F. & J. 234. In the case of a contingent remainder, where the prior estate must certainly determine in favor of someone, damages for part waste are also recoverable, but will be impounded for the benefit of whomever later proves to be entitled. Watson v. Wolff-Goldman Realty Co., 95 Ark. 18, 128 S. Ŵ. 581. But in an executory devise, as the contingency ending the first estate may never arise, no such damages can be given. Ohio Oil Co. v. Doughetee, 240 Ill. 361, 88 N. E. 818. As soon as the executory devisee comes into possession, however, as he is now ascertained, the objections to allowing him a remedy vanish. A wrong with a suspended remedy is not anomalous; for example, an ultimate remainderman who had no action for waste may sue if the intermediate estate subsequently lapsed. See Duval v. Waters, 1 Bland (Md.) 569, 573. It is submitted that the same result should be reached in the case of chattels, and as the injury is to property it should survive. See Jenkins v. French, 58 N. H. 532. The court in the principal case, while correct in decision, was troubled with the survivorship point and avoided it by the questionable discovery of a trust or bailment in the first holder.

WITNESSES- - EXAMINATION CROSS-EXAMINATION TO CREDIT: INTEREST OF WITNESS IN OUTCOME OF SUIT. In a suit for personal injuries the defendant called as a witness the conductor in charge of the car which had caused the damage. On cross-examination the plaintiff sought to discredit the wit

ness by proving his contract of employment, which provided that the employer might reimburse himself for all damages caused by the negligence of the conductor by deducting the sum from his wages. The evidence was excluded. Held, that this is reversible error. Henry v. Tacoma Ry. & Power Co., 219 Fed. 874 (C. C. A., 9th Circ.).

Although the old rule disqualifying a witness pecuniarily interested in the result of a suit has been almost everywhere abolished, nevertheless it is proper to discredit the testimony of a witness by showing interest. Luckhurst v. Schroeder, 149 N. W. 1009, 1012 (Mich.); see 2 WIGMORE, EVIDENCE, § 969. Therefore it has been held that the fact that a witness is employed by one of the parties to the suit may be considered by the jury as bearing on his credibility. Donley v. Dougherty, 174 Ill. 582, 51 N. E. 714. Cf. Marquette, H. & O. R. Co. v. Kirkwood, 45 Mich. 51, 7 N. W. 209. In addition, the servant's common-law liability for his own negligence may be pointed out. See Hamilton v. Chicago, M. & St. P. Ry. Co., 103 Ia. 325, 331, 72 N. W. 536, 538. The contract in the principal case, since it gives the employer the right to deduct from the conductor's wages, in addition to his common-law right to reimbursement, increases the employee's pecuniary interest in the outcome of the suit. It correspondingly intensifies the temptation to lie, and should be admissible to discredit the witness. Accordingly, the result of the principal case is questionable only in that it reverses the trial judge on a point resting so largely within his discretion. Miller v. Smith, 112 Mass. 470, 476; see 2 WIGMORE, EVIDENCE, § 944.

WITNESSES PRIVILEGED COMMUNICATIONS - HUSBAND'S LETTERS TO WIFE. In a prosecution for bigamy, the state offered letters from the husband to the alleged first wife to establish the fact of that marriage. These letters had fallen into the hands of a third person, and were then secured by the prosecution. Held, that the letters are admissible. McNeill v. State, 173 S. W. 826 (Ark.)

The privilege not to have private communications between husband and wife disclosed may be waived, since the evidence itself is not fundamentally inadmissible. See Perry v. Randall, 83 Ind. 143, 146; Stickney v. Stickney, 131 U. S. 227, 237. Contra, Goodrum v. State, 60 Ga. 509. But the privilege belongs not to the addressee alone, but to the communicating party, or possibly to both. Derham v. Derham, 125 Mich. 109, 83 N. W. 1005. A voluntary delivery, therefore, by the addressee should not suffice to waive the privilege. Mahner v. Linck, 70 Mo. App. 380; Wilkerson v. State, 91 Ga. 729, 17 S. E. 990. But where the letter is originally sent with knowledge that it will be read by a third person there is clearly no privilege. De Leon v. Territory, 9 Ariz. 161, 80 Pac. 348. Again, a conversation overheard is similarly unprivileged, for although there is no intention to publish the communication, there is a publication by the act of the person entitled to the privilege. Commonwealth v. Everson, 29 Ky. L. Rep. 760, 96 S. W. 460; Commonwealth v. Griffin, 110 Mass. 181. Where a third party obtains the letter without the consent of the other spouse there is clearly no publication, but the weight of authority, in accord with the principal case, makes no distinction and holds the privilege equally inoperative. Hammons v. State, 73 Ark. 495, 84 S. W. 718; State v. Hoyt, 47 Conn. 518; State v. Buffington, 20 Kan. 599. Contra, Scott v. Commonwealth, 94 Ky. 511, 23 S. W. 219; Bowman v. Patrick, 32 Fed. 368. A further ground of the decision is that the defendant, by denying the validity of the first marriage, is precluded from asserting the privilege of a spouse. Since the burden of establishing a privilege falls upon the party attempting to assert it, it is immaterial that it is equally inconsistent for the prosecution, while asserting the validity of the first marriage, to object to the assertion of the privilege. Contra, State v. Ulrich, 110 Mo. 350, 19 S. W. 656.

BOOK REVIEWS

CONSERVATION OF WATER BY STORAGE. By George F. Swain, LL.D. New Haven: Yale University Press. 1915. pp. xvii, 384.

This is a book which deserves to be brought to the attention of lawyers, not merely because the subject is one with which lawyers at present are having much to do, but even more because the author, unlike most laymen who have written upon such questions, has exerted himself to find out what the law is and to consider the relation of the law to matters of engineering import instead of employing the easier but less profitable method of ignoring or abusing the law. The chapters which are of particular interest to the legal profession are: Chapter 3. Water power at government dams on navigable streams; Chapter 4. Water power at private dams on navigable streams; and Chapter 5. Water power on the public domain. The appendices contain valuable information with respect to legislation upon the subject of water rights, and there is a full bibliography, extending over thirteen pages, which should be useful to lawyers and legislators as well as to engineers.

In recent years a notion has sprung up that running water is res publica; that it is owned by the state in exactly the same way, for example, that the state house is owned. This idea had its origin in the attempts of western states to make constitutional provision for the adoption of the appropriation system where it was feared federal patents had fastened the system of riparian rights upon considerable areas. All that these assertions of state ownership ever really achieved was to assert a state sovereignty with respect to the use of the water resources of the state, which really needed no assertion. To-day we may see three theories with respect to control of the use of water in competition. By the common-law theory the water of running streams is to be used and used only by riparian proprietors who are limited to a reasonable use of the water; that is, a use consistent with a like use by all others similarly situated. According to the appropriation doctrine, developed in the Pacific and Rocky Mountain states, the prior appropriator of the waters of a stream to a beneficial use acquires a property right to use the amount of water which he has appropriated, and at present, with the advent of the "use theory" as the prevailing idea in the water law of the western states, such right is measured in its extent and its duration by the beneficial use to which the water is put. A third system is the system of the Roman law with respect to what the Romans called "public streams," namely, the method of concession or franchise whereby the sovereign concedes to certain persons at a fixed toll or rental the privilege of using the water of running streams. The French code makes every stream which is capable of floating a boat or raft a public stream for the purposes of this rule. The Prussian water law of 1913 also gives a wide extension to this method of government concession. The doctrine of the civil law was obviously not adapted to the necessities of the pioneers of the Pacific slope when the appropriation doctrine was adopted in this country, for at that time there was no organized government at hand on the public domain to license use of streams, there had been no survey of the water resources of the country, and the idea of such license or concession was foreign to the individualistic ideas of the pioneer. But the federal government, assuming that it has complete common-law riparian rights on the public domain in all of our states where public domain exists, and taking advantage of its power to prevent encroachment upon navigation in navigable streams, has been inclined of late to adopt a policy which amounts to nothing less than an importation of the civil-law idea

into this country. Perhaps Professor Swain assumes too readily the soundness of the contention of federal administrative officers with respect to water on the public domain in states where riparian rights do not exist under the local law. See Mr. Bannister's article, "The Question of Federal Disposition of State Waters in the Priority States," 28 HARV. L. REV. 270. But he is undoubtedly in accord with eminent legal authority in conceding this claim, and it is not material to his argument which view is taken. In any event, the attempt to use local resources in undeveloped parts of the country as a means of raising general revenue, operates, as Professor Swain points out, simply to perpetuate a system of waste and is like nothing so much as the insistence of Great Britain prior to the American Revolution upon exercise of its technical legal authority to raise general revenue out of the colonies. After all there is a great deal in a name. If a policy of waste is labelled conservation, the label may endow it with a long life in the face of common sense and in spite of all that we should have learned from attempts of the federal government to make a profit at the expense of the locality out of the public domain in the territories prior to the Civil War.

The matter is one of politics rather than of law, but it cannot be insisted upon too strongly that those who frame our legislation should understand the legal as well as the economic theory upon which they are proceeding, and those who are called upon to draft legislation in this connection will do well to read and ponder what Professor Swain has to say.

R. P.

THE VALIDITY of Rate RegulATIONS. By Robert P. Reeder. Philadelphia: T. & J. W. Johnson. 1914. pp. 440.

This is the kind of a book that makes a reviewer's task ungrateful. For an ungrateful task it is to be compelled to say that a great deal of effort, wide reading and considerable intellectual freedom from phrases, have, after all, been unproductive. Few subjects are more important, and surely none more interesting, than a consideration of "the principles of Constitutional Law, which are involved in rate regulation." From a book of four hundred pages, which aims at more than a digest's aloofness from contested issues, one cannot demand less than that it should help somewhat toward the solution of knotty problems - at least to the extent of a penetrating analysis of the issues. What is to be said then of a book on the Validity of Rate Regulation that leaves practically untouched, except for a conventional statement of the cases, the whole problem of compelling unremunerative services or the carriage of specific commodities at unremunerative rates? (See Northern Pacific Ry. Co. v. North Dakota, 236 U. S. 585; Norfolk & Western Ry. Co. v. Conley, 236 U. S. 605; 28 HARV. L. REV. 683.)

Instead of grappling with problems such as these, which are peculiarly within the jurisdiction of the author's subject, the bulk of the book some hundred pages is devoted to an attempt to demonstrate that the Supreme Court is wrong in extending the "due process" clauses to substantial rights instead of confining them to the safeguarding of orderly procedure. This is shooting at a target which is tempting to all constitutional marksmen, but what's the use? Holmes and Thayer and Pound and Corwin and Shattuck and the rest have again and again smoked out the enemy, or confined his operations, but he is as alive as von Hindenburg after a defeat. One does not detect even new kinds of weapon in the attack. Particularly immaterial to the main subject of the book is this predominant detour, inasmuch as, so far as questions affecting the validity of rate regulations go, Mr. Reeder, after disposing of questions by throwing "due process" out of the window, lets them walk in again